Unless you can afford to pay cash for a home (Congratulations, if you can!), you will need to finance your Seattle-area home purchase with a mortgage. Although mortgages are available from different lenders such as banks, savings and loans, mortgage companies and some credit unions, they all share some common processes.

First, you should learn how much home you can afford.  The PSHBC calls this "establishing a budget". Once you know what you can afford, you can make better decisions about what and where to buy. You will also save time. Unfortunately, many Seattle home buyers start to shop without knowing what they can afford. They either end up disappointed, thinking that can't afford a home at all, or underestimate their buying power and purchase a home that doesn't meet their needs. A call to the PSHBC can prevent both situations.

Next, you should become pre-qualified from a lender. You will need to meet with the lender's mortgage counselor and provide personal information. Lenders will want to see proof of income (pay stubs and W2 forms) and learn about any existing debt (automobile loans, student loans, credit cards, etc.). After a brief analysis, your prequalification will result in a specific amount you can afford. Now, you can start to be a serious home shopper.

It's a good idea to become pre-qualified as an increasing number of Seattle home sellers and builders will not write purchase agreements with buyers who are not pre-qualified.

Becoming pre-qualified for a mortgage speeds up the mortgage application. Once you find a home you want to purchase, you will write a purchase agreement with the seller and submit it to your lender. If you are buying a new home, the builder's sales agent will usually submit your purchase agreement to your lender. If you are buying a resale home, your Real Estate agent can do this for you.

Depending on how much information was requested from you during the prequalification process, you may have to provide additional information and/or complete a formal mortgage application. Your lender's mortgage counselor will guide you through the process.  Within a few days after submitting the mortgage application, your lender will provide to you a good faith estimate. The good faith estimate will disclose to you estimated closing costs, fees and your estimated monthly payment.

A major factor in approving mortgage applications is the information found in your personal credit history. A history of late payments will raise questions with lender. If you have concerns about your credit history, you should contact the PSHBC, where you can obtain a free credit analysis and review your credit report.

Mortgage lenders usually finish their analysis of a mortgage application in less than a month. If you became pre-qualified before you started to shop, the decision time will likely be much shorter.  Once you are approved, the home buying transaction will be able to be completed. At closing, you will visit the title company to sign lots of papers, but the title agent will carefully explain each form. Again, your Real Estate agent can accompany you at this final meeting.

If this sounds complex, it doesn't have to be. The PSHBC is good at making things hassle-free by carefully explaining the purpose of the different steps within the mortgage process.